We headed into session with high hopes to address tax relief for working families, create affordable housing, and provide access to early learning for all Hawaii’s children. But no one expected what would happen next. On March 6, the first case of COVID-19 hit the state.
Now we have 600-plus cases resulting in school closures, spiking unemployment and a billion-dollar budget shortfall.
Congress provided over $7 billion to Hawaii, most of which went directly to hospitals, clinics, small businesses and social service providers. The state government received $1.25 billion of which 45% or $562 million went to the counties leaving $688 million to the state to take care of its many needs.
Understanding the gravity of our state’s current fiscal crisis and the economic hardships most residents of this state are facing, we as public servants owe the citizens both immediate and long-term stability and security. Thinking and acting responsibly and prudently with the federal resources that are being provided to us is imperative.
To this end, the Legislature has allocated $175 million to the counties of Hawaii, Maui, and Kauai in which the mayors of each island determined based on their assessments what the greatest needs for their respective islands were:
Additionally, various state departments and agencies received direct funding through other COVID-19 related federal funding programs.
The state Office of Community Services received over $2 million which will go towards food purchases statewide. OCS will be working with nonprofits such as the Hawaii Foodbank on food distribution. The Executive Office on Aging received $3.6 million for senior citizens and home delivery meals.
The Department of Human Services has been approved to provide emergency Supplemental Nutrition Assistance Program (food stamp) funding to address food needs for SNAP households. DHS estimates this program alone will bring in $13 million per month for food assistance to individuals and families across the state.
The Legislature provided an additional $2 million towards SNAP funding. The U.S. Department of Agriculture has also provided $3.1 million for the Farmers to Families Food Box program.
To address the growing demand in unemployment, the Department of Labor and Industrial Relations has received $3.9 million in grants. The department also has applied for a $1.3 billion loan to continue to payout unemployment insurance benefits.
In addition, the department has launched the Pandemic Emergency Unemployment Compensation program. This program will provide an additional 13 weeks of unemployment benefits.
Exacerbating Hawaii’s economic woes is our over-reliance on tourism.
For economic recovery, the state Office of Community Services will work with Community Action Agencies in all four counties in spending over $5 million to support anti-poverty programs, rental and utility bill assistance, food delivery, child care, homeless and emergency shelter.
Exacerbating Hawaii’s economic woes is our over-reliance on tourism. Tourism accounts for 20% of our state’s economy, per a May 7 webinar, Dr. Eugene Tian, Chief State Economist, presented on the “Economic Impacts of COVID-19.”
He estimates that our state’s non-tourism sector will take at least two years to recover. For tourism, his forecast is that it will take five to six years. As a result, from our dependency on this sector, both general tax revenues and transient accommodations tax revenues have and will continue to drop significantly.
The monthly cost to operate our state government is $677 million. This cost covers government services for our state hospitals, education, prisons and social safety net programs.
The director for the Department of Budget and Finance has stated “we could have a cash-flow problem. We also have a budget problem.” The director estimates the state has enough funds to operate through the end of this calendar year.
We are setting aside a portion of the federal CARES Act relief funds for just three weeks so we can gather information to wisely budget the funds to cover future safety net programs and payments for unemployment insurance. The Legislature will reconvene on June 15 to address the many needs of the people of this state.
We are very thankful and grateful for the aloha and care that our residents have shown each other. Simple gestures such as wearing a mask and keeping social distance demonstrate your courtesy towards others.
Working together, we can get through this challenging time.
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